Research and Development Tax Relief – Is your company eligible?
25th November 2013
An important part of any successful business is to make sure that a claim is made for all available tax reliefs and tax credits. One such relief that is often overlooked relates to Research and Development (R&D).
In general terms, companies that undertake R&D projects with the aim of developing knowledge or capability in a certain field of science or technology, should be able to make a claim for R&D Relief. A qualifying company can claim R&D Relief to help reduce its corporation tax.
From 1 April 2012, for small or medium-sized companies, the tax relief on allowable R&D expenditure is 225 per cent. This means that for every £100 of qualifying expenditure, your company would have its corporation tax reduced by a further £25 (assuming the lower 20% tax rate for small companies).
If your company does not pay corporation tax owing (say) to initial startup costs, a claim should be available for tax credits which are paid directly from HM Revenue & Customs (HMRC).
The problem for many companies is that they are either not aware of the availability of R&D Relief or do not have a full understanding of the criteria for being eligible to make a claim. As a result, there are many companies who are eligible (or have been eligible in a previous accounting period) for R&D Relief that are missing out. In certain situations it is still possible to claim R&D Relief for previous accounting periods, even if it is unlikely to apply for current or future accounting periods.
At Plus Accounting we have the knowledge to assess whether you are eligible to make an R&D Relief claim and the expertise to process and make the claim on your behalf. If you feel this may affect your company, please don’t hesitate to contact us to discuss whether you qualify for relief.
For more information, please contact Luke Thomas – Manager